TaxTMI 
TaxTMI 
2026 (6) TMI 1048
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....matter and the facts are narrated from the said petition, which read thus: 3.1 The petitioner is a company incorporated under the Companies Act, 1956 and majority of its shareholders are citizens of India. The petitioner is therefore, entitled to the constitutional rights guaranteed under Articles 14 and 19(1)(g) of the Constitution of India. The respondent is a 'State' within the meaning of Article 12 of the Constitution of India. 3.2 The respondent issued a show cause notice dated 28.03.2025 under sub-section (1) of Section 148A of the Income Tax Act, 1961 (for short 'the Act') whereby, the petitioner was called upon to show cause as to why notice under Section 148 of the Act should not be issued for the year under consideration. The petitioner, vide letter dated 21.04.2025, furnished a detailed reply to the said show cause notice. 4. The present writ petitions are filed challenging the action of the respondent for reopening the assessment proceedings. In Special Civil Application No. 14057 of 2025, the petitioner has challenged the notice dated 26.06.2025 issued under Section 148 of the Act as well as the order dated 26.06.2025 passed under Section 148A(3) of the Act fo....
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....se as there is no income chargeable to tax which has escaped assessment. He has referred to the old provisions of Section 147 of the Act, which were operated till 31.03.2021, which had the words "reason to believe" that any income chargeable to tax has escaped assessment whereas, with effect from 01.04.2021, the provisions of Section 147 of the Act can be invoked if any income chargeable to tax has escaped assessment. 6.1 Regarding allegation doubting the business of the petitioner and not possessing NBFC (Non-Banking Financial Company) license, it submitted that such allegations are ill-founded since the question is not about lending but about borrowing and secondly, borrowing from group concerns does not convert the petitioner into NBFC. It is submitted that this aspect was also considered by the Coordinate Bench in the writ petition being Special Civil Application No.334 of 2022. 6.2 While dealing with the allegation about no interest having been charged in respect to loan transaction from certain parties, it is contended that the same ipso facto would not mean that there is escapement of income since it would be commercial sense of the petitioner whether to charge interes....
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...., which did not have the expression "actual escapement of income beyond any shadow of doubt". It is thus submitted that in the new regime governed by the substituted Sections 147, 148 and 148A of the Act, the threshold has been substantially lowered to merely requiring "information which suggests that the income chargeable to tax has escaped assessment". It is submitted that the Assessing officer has specifically recorded that there was huge transaction of Rs. 422 crores in unsecured loans and repayments without there being any supporting evidences such as documentation of terms and condition/written arguments and hence, such transaction would become suspicious which would satisfy the expression "information which suggests escapement". It is submitted that for the A.Y. 2017-18, which was examined by this Court in the aforementioned writ petition, this Court had quashed the reopening since the Assessing Officer had failed to refer to any evidence much less a single evidence recording reasons whereas, in the present case, there is a live nexus which suggests that there is escapement of income chargeable to tax. Thus, it is urged that at this preliminary stage, this Court may not call....
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....-18, vide judgment and order dated 01.04.2025, set aside the impugned notices of reopening the assessment by holding that there was no live nexus of the information with the transactions recorded and audited as per the books of accounts of the petitioner to come to even prima facie conclusion that the income has escaped the assessment. It is not in dispute that the said judgment has been accepted by the revenue. 10. Coming to the present case, the revenue has attempted to distinguish the aforesaid judgment by resorting to the amended provisions of Section 147 of the Act. Up to 31.03.2021, the provisions of Section 147 of the Act could have been invoked by the revenue if the Assessing Officer has "reason to believe" that any income chargeable to tax has escaped assessment for any assessment year whereas, w.e.f. 01.04.2021, the aforesaid expression has been replaced by "if any income chargeable to tax has escaped assessment". 10.1 In the present case, we have noticed upon the scrutiny of the impugned show cause notice dated 26.06.2025 issued under Section 148 of the Act as well as from the order dated 26.06.2025 passed under Section 148A(3) of the Act that, to the extent that i....